Broadening Formations
Most chart patterns compress. The broadening formation does the opposite: higher highs AND lower lows, the range expanding like a megaphone. To most methods it reads as chaos. To Rob Smith it was the most honest picture on the chart — each swing running the stops beyond the previous one, edge to edge.
Why the edges are magnets
Each leg of a broadening formation ends by taking out the prior extreme — the resting stops just beyond it — and then reversing. Those extremes are liquidity, and the market swings between its pools. Trade located AT an edge has both definition (the line is the risk) and room (the entire width is the target).
Trading inside the megaphone
The classic mistake is trading the middle, where the formation gives neither edge. The Strat approach waits for a trigger at an edge: a failed 2 beyond the upper line, or a 2-1-2 forming off the lower one, with the opposite edge as the destination. Outside bars (3s) are native to these formations — every leg that engulfs the last prints one.
Timeframes inside timeframes
Broadening structure is fractal: a daily megaphone will contain hourly setups at its edges. The higher-timeframe formation provides the map — which levels are magnets — while the lower timeframe provides the trigger. Our break charts draw active higher-timeframe cones over intraday alerts for exactly that reason.
See it live, right now
Every concept on this page is detected in real time across 190+ tickers — candle typing, trigger levels, and alerts the second a level breaks.
FAQ
Is a broadening formation bullish or bearish?
Neither inherently — it is a liquidity map. Direction comes from the trigger at an edge; the formation supplies the levels and the travel distance.
Why did Rob Smith emphasize broadening formations?
Because they describe what markets actually do — run the stops beyond each prior extreme — rather than an idealized shape. He treated the edges as the tradeable locations and the width as the payout.
How do you find the edges?
Connect the expanding swing highs and the expanding swing lows. Each new extreme that exceeds the last while the opposite side also expands confirms the formation and extends its lines.
Keep learning
Educational content, not financial advice. Patterns describe probabilities, not promises.